Major Changes To Island’s Companies Act
Major changes to the way Bermuda’s off-shore sector conducts business on the island were introduced in Parliament on Friday [Nov. 25].
The Companies Amendment [No. 2] Bill 2011 was tabled in the House of Assembly by the Ministry of Business Development & Tourism.
The proposed legislation proposes significant amendments to the Companies Act 1981, the principal statute governing the formation and operation of Bermuda companies.
Key Amendments Proposed Include:
- Directors: Sole directors and corporate directors of Bermuda companies will be permitted.
- Annual General Meetings: Companies will have the option to waive annual general meetings.
- Financial Assistance: Prohibitions on providing financial assistance will be removed.
- Share Transfers: Paperless share transfers will be possible for listed companies.
- Dividends and Distributions: Amendments will be made to the solvency test, allowing Bermuda companies to declare dividends or distributions when recording a profit, notwithstanding that the company may carry a negative retained earnings balance.
- Mergers: A new process for mergers will be added as an alternative to the existing amalgamations procedure. In a merger, companies combine their assets, liabilities and undertakings and a surviving company is created.
It is not yet known when the amendments to the Companies Act 1981 will come into effect, although it could be as soon as the end of 2011.
“The bill is the result of the Bermuda Government’s open communication with the private sector which continues to encourage the promotion and maintenance of Bermuda as a leading international finance centre,” said a spokesman for leading Hamilton law firm Conyers Dill & Pearman.
“This co-operative approach demonstrates the willingness and ability of Bermuda to adapt to the changing product needs of clients and corporations around the world.”
